Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release --September 6, 2001.
Contact Bob Brammer, 515-281-6699

Miller Urges Iowans to File for $1 Million in Refunds in Prescription Drug Antitrust Case

The filing period for refunds ends September 29. Iowa has most individual claims filed so far.

DES MOINES. Attorney General Tom Miller urged Iowans to check out their eligibility and then file claims for an estimated $1 million in refunds in a case that alleged prescription drug overcharges resulting from a drug monopoly scheme led by Mylan Laboratories of Pittsburgh, PA.

"This is one of the best refund cases I've seen," Miller said. "It is easy for people to learn if they are eligible, it is simple to assemble the records and file the claim, and refunds can be substantial. But people will not get a refund unless they file a claim. We strongly urge Iowans to check it out and file a claim before the claim period ends on September 29."

Miller said refund checks are estimated to range from a few hundred up to about $2,000.

Most consumers who bought "Lorazepam" and "Clorazepate" any time in 1998 or 1999 are eligible. The two drugs are widely used to treat symptoms of anxiety, including use by people with Alzheimer's disease, people in nursing homes, hospice patients, and others. The drugs are prescribed about 20 million times a year.

"The good news is that more Iowans have filed individual claims on their own than in any other state," Miller said. "The bad news is that we believe there are many other Iowans who are eligible for substantial refunds if they will only file."

"Go to your pharmacist," Miller urged. "Iowa pharmacies have been extremely helpful to their patients in retrieving the needed records. Jerry Karbeling, Senior Vice President of Public Affairs for the Iowa Pharmacy Association and owner of Big Creek Pharmacy in Polk City, joined Miller at the news conference in Des Moines.

Consumers may obtain detailed information on the settlement and claims procedures by calling the Settlement Administrator toll free at 800-899-5806 (877-564-7096 for the hearing impaired) or going to the web site www.agsettlement.com. Information also is available at the Attorney General's web site: www.IowaAttorneyGeneral.org. Consumers may e-mail the Administrator at administrator@agsettlement.com.

Miller said 1157 Iowans had filed individual claims on their own as of August 24. The next closest state, Florida, had 983 individual claims, and the average per state regardless of size was about 350 claims. Iowa's individual claims accounted for over 6.5% of the total for the nation. The claim filing period began June 1 and expires Sept. 29.

Miller said a team effort in Iowa is responsible for the high number of individual claims. "The Iowa Pharmacy Association and many of its members have exerted strong efforts to assist their patients and many times to reach out and encourage their patients to file a claim," Miller said.

"And the Alzheimer's Associations and Iowa's aging network have done an outstanding job of spreading the word about this important case and refund arrangement," he said. Miller said there has been impressive networking and communication work by Iowa's Area Agencies on Aging, local senior centers all over Iowa, the State Department of Elder Affairs and Department of Public Health.

News media in communities all over the state also have been crucial, Miller said. A "Consumer Advisory" bulletin on the Mylan refunds issued for July appeared in more newspapers than any previous "Advisory."

Iowa also had 799 "waivers" filed in the case as of August 24. Typically, "waivers" resulted when a major pharmacy chain contacted customers and sent them a basic application and confidentiality waiver form. The forms could be submitted to the settlement administrator without customer purchase data, and the administrator then can obtain purchase data directly from the pharmacies. Iowa's 799 waivers totaled about .71% of the national total.

"I am very proud of Iowa's grass roots efforts to help people recover these refunds," Miller said.

Background:

Miller described the antitrust case: "The States and Federal Trade Commission alleged that Mylan developed an illegal plan late in 1997 to drastically increase prices on the two generic drugs. First, Mylan eliminated real and potential competitors by cornering the market on the drugs' active ingredients. Then, in early 1998, Mylan raised the price of one drug by 2000 percent and the other by 3000 percent," he said.

"We alleged that Mylan's actions were illegal and unconscionable -- all the more so because the drugs are so important to many people," he said.

U.S. District Court Judge Thomas Hogan on April 27 gave formal preliminary approval to the $100 million settlement, which also includes an injunction under which Mylan agreed to restrictions in its future supplier agreement. The State of Iowa will receive over $500,000 in the settlement because of overcharges it suffered because of the defendants' activities, although about half of that is expected to be returned to the Federal government which helps fund states' Medicaid programs.

The lawsuit alleged that Mylan Labs cornered the market on ingredients for the two drugs, Clorazepate and Lorazepam, by entering into long-term agreements with suppliers and distributors so that only Mylan would have reliable sources to obtain the active ingredients. Other defendants named in the suit were Cambrex Corporation, a New Jersey maker and marketer of specialized chemicals; Profarmaco, a wholly-owned Italian subsidiary of Cambrex; and Gyma, a New York company that distributes pharmaceutical compounds for Profarmaco and other manufacturers. The defendants denied the allegations.

After cutting off competitors' supply of key active ingredients for the drugs, the suit alleged, Mylan raised the price of Clorazepate more than 3000 percent in January 1998. The price jump translated to an increase from about two cents per tablet to over 75 cents per tablet for Clorazepate.

Two months later, Mylan increased the price of Lorazepam more than 2000 percent, or an increase from just over one cent per tablet to over 37 cents per tablet.

The suit alleged antitrust violations by Mylan including illegal restraint of trade, monopolization, and conspiracy to monopolize the markets for the two generic drugs. "It is illegal for companies to eliminate competition and then raise prices like this," Miller said.

"I am especially pleased we were able to take this action in the area of prescription drugs. High drug prices concern everyone, especially older Iowans. While we can't guarantee lower prices, we will take action when companies violate antitrust laws, because that hurts consumers, taxpayers and companies that play by the rules."

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